What Makes a Good Contractor?

November 20, 2018

Good contractors are made not born

Some construction contractors make the news for all the wrong reasons.

They are declared bankrupt, involved in dodgy dealings, don’t pay their suppliers or subcontractors, produce poor quality work, finish their projects late, or seriously injure or even kill people in the course of construction work.

Then there is a multitude of other construction companies that are ordinary, maybe even mediocre – they kind of survive from month to month.

Occasionally, there are construction companies that go from strength to strength, growing, winning new projects, making money, and they’re the employer of choice for construction professionals.

So what differentiates these companies and what makes them successful?

Construction companies have many different stakeholders who have diverse requirements and demands. Balancing the shareholder’s demands for profits, with client’s expectations of being treated fairly and getting the lowest price, and employees’ individual aspirations, is never easy and takes good management. Firstly we need to understand what each stakeholder thinks makes a good contractor.

A good contractor from the client’s side

Of course, clients want a contractor that will deliver a quality project on time, safely and within their budget. But importantly they also want a project which they can easily manage and has few problems for them and creates the least amount of work.

They don’t want bad publicity and they don’t want to have to deal with unhappy neighbors or protesting public. They want to have a successful project with minimal fuss.

A good contractor from an employee’s view

Employees expect to be treated fairly and to be paid a good wage on time. They also want to feel appreciated, they usually want to learn new things and they want to see a career path, knowing they will be promoted to other roles and responsibilities.

Of course, they also want to return home safely at the end of their shift without any long-term impacts on their health. Like everyone, they would like to spend time with their family and have quality free time.

A good contractor from a shareholders view

Shareholders would like tons of profit and a company that continually increases revenue and profits. Some shareholders would like to know that the company is acting in an ethical matter, that it respects the environment and that it won’t be in the media for the wrong reasons.

A good contractor from the general public

Well, most people don’t care, unless the construction work impacts their lives. So neighbors don’t want to have a noisy construction project next door. They don’t want their streets covered in litter or have the contractor’s workers taking up all the local parking. Commuters don’t want to be unduly delayed by construction work. Generally, people don’t want their lives disrupted.

12 things that make a contractor excellent?

Cash flow – companies must have a sustainable cash flow. Even profitable companies can become bankrupt if they can’t pay their bills because their cash flow is negative. Basically, don’t run out of money.

Continuity of work – every project has a limited duration and when it’s finished the contractor has to find new projects to keep their employees and equipment employed and to pay their overhead costs. Construction is a very cyclical industry with times of little work followed by times when work is plentiful. It can be difficult maintaining continuity of work for resources. Resources standing idly can be very costly. Don’t run out of work.

Profitability – every company has to be profitable. Successful contractors avoid loss-making projects. They avoid risky jobs and they have experienced and thorough estimators.

A good name – a good reputation is essential to win the next projects and to attract the best people. Complete projects on time, achieving good quality, without safety or environmental incidents with minimal fuss to the client. Avoid poor publicity.

Good safety practices and a good safety record is essential – accidents cost money and cause delays. Many clients consider a contractor’s safety record when selecting a contractor. Poor safety creates bad publicity. Employees want to know that their safety is important.

Good people – people that are skilled, reliable, diligent and proud of their work and their company. Competent people are essential. Good people help create a good reputation, they build relationships with clients and they attract good people.

Being able to attract good clients and win the right projects at the right price – this is a team effort. Successful contractors avoid projects which are very risky or where risks are so large that should they eventuate the company could sink.

Being innovative – using new technology, materials, methods, and techniques to the advantage of the company and to the benefit of clients and employees.

Respecting the environment – poor environmental practices lead to poor media attention and it can be costly. Why mess up the World, why mess up the place for our children?

Being proactive – foreseeing and avoiding problems before they arise. Solving problems when they arise. Never running away from problems.

Looking after its people – providing training and mentoring. Empowering employees, treating them fairly and embracing them as part of the team.

Not engaging in corrupt or dishonest behaviors.

Questions to Ponder:

Is your company an excellent contractor?

What do your clients, shareholders, and employees think?

What makes your company successful?

Will your company be successful for the next 20, 50 and even 100 years?

Author: Paul Netscher

Paul Netscher is an experienced construction professional who managed over 120 projects in 6 countries over 28 years. Paul writes for the ClockShark blog and is the author of five books on construction project management.